Landlords, Protect Your Investment, Avoid Costly Mistakes
Category Rentals
Rental investments are not only a solid store of wealth, but can deliver consistent cashflows and returns on top of tax benefits. These, however, also come with risks, but these can be mitigated with the right approach and rental management strategies.
An important element to maximising the returns on your rental investment is to be aware of the pitfalls which can affect the management of the asset and its ability to deliver optimum returns on your investment. Seeff's rental agents highlight a few of the costly mistakes to avoid:
Over-capitalising on renovations - While renovations and upgrades can make the property more attractive to tenants, this must be carefully balanced with the returns that you can earn. Focus on low-cost, high-impact improvements such as painting, good maintenance, and cosmetic upgrades.
Poor tenant screening - Rushing to fill the property can result in tenants who pay late or damage the property. Rather allow enough time to source a good calibre tenant. Here, a skilled rental agent who is experienced in finding and vetting tenants can mitigate against the risks.
Over or under-pricing - Setting the rent too high risks longer vacancy periods, while setting it too low could reduce your return on investment. Working with an experienced local agent can provide the right guidance in terms of the optimal rent to charge to ensure a steady rental income and minimal vacancy periods.
Excessive rent increases - A good calibre tenant who pays their rent on time and looks after the property means enables the landlord to earn a steady income with minimal risks. Excessive price hikes may cause tenants to come and go, adding to the costs of cleaning and maintenance. Rather, keep increases market related to minimise risks.
Underestimating the administration required - The administrative burden has increased notably, from rent collection, invoicing and contract management to dispute handling, and maintenance. A rental management solution means that landlords can essentially benefit from economies of scale and greater efficiencies.
Poor financial management - Good financial management include investing the tenant's deposit with interest for the duration of the lease, budgeting for maintenance requirements, and ensuring the tenant pays on time. These are vital to protecting your asset and financial interests.
Poor compliance management - Rentals have become complex with many compliance issues including new requirements such as a Condition of Property Report. A professional rental management service can handle all of this efficiently ensuring full legal compliance and providing peace of mind to the landlord and tenant.
Inadequately insured - Landlords should ensure their properties are adequately insured against all risks. Aside from the general risks of flood, fire and storm damage, there are also aspects such as the geyser or other installations which could be costly to replace or repair if not adequately insured.
Hiring a professional rental agent is vital to protecting your rental investment and ensuring peace of mind. The fee often pays for itself in saved time, stress, and reduced vacancy periods. A reputable rental agency such as Seeff offers the latest Proptech and legal compliance to make managing the rental processes and financial matters seamless for landlords. This helps mitigate against financial and legal risks associated with rental investments.
Seeff offers the systems and expertise to manage complex issues, such as tenant disputes and arrears, dealing with these speedily and efficiently. Our systems provide for quick and efficient responses to maintenance issues, which builds tenant trust and prevents small problems from escalating.
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Author: Gina Meintjes
